<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Solicitation Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
TRAINER, WORTHAM FIRST MUTUAL FUNDS
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction
applies:
..........................................................
2) Aggregate number of securities to which transaction
applies:
..........................................................
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
..........................................................
4) Proposed maximum aggregate value of transaction:
..........................................................
5) Total fee paid:
..........................................................
[ ] Fee paid previously under preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.: Fedwire #0809
3) Filing Party: First Data Investor Services Group, Inc.
4) Date Filed: 10/21/98
<PAGE> 2
TRAINER, WORTHAM FIRST MUTUAL FUNDS
IMPORTANT PROXY MATERIALS
-----------------------------------------------------------
CONCERNING PENDING CHANGES INVOLVING
TRAINER, WORTHAM FIRST MUTUAL FUNDS
-----------------------------------------------------------
Please Review and Cast Your Vote PROMPTLY !
Dear Fellow Shareholder:
We are pleased to enclose a proxy statement and notice for a Special Meeting of
Shareholders of FIRST MUTUAL FUND and TRAINER, WORTHAM TOTAL RETURN BOND FUND
(the "Funds") of TRAINER, WORTHAM FIRST MUTUAL FUNDS (the "Trust") to be held on
November 14, 1998. Shareholders who cannot attend this meting are strongly
encouraged to vote by proxy. The enclosed proxy materials contain information
you should read carefully regarding several important proposals regarding your
Fund.
These proposals are made necessary in connection with a proposed change in
control of Trainer, Wortham & Company, Inc. ("Trainer, Wortham") the Investment
Advisor to the Funds. Trainer, Wortham has entered into an agreement to be
acquired by First Republic Bank. TRAINER, WORTHAM WILL REMAIN A SEPARATE ENTITY,
WHICH WILL BE A WHOLLY OWNED SUBSIDIARY OF FIRST REPUBLIC BANK.
The completion of the transaction between Trainer, Wortham and First Republic
Bank will cause the current investment advisory agreements between Trainer,
Wortham and each of the Funds (the "Current Agreements") to terminate. For this
reason, shareholders are being asked to approve new investment advisory
agreements between each Fund and Trainer, Wortham which will take effect when
Trainer, Wortham becomes a wholly-owned subsidiary of First Republic Bank
(the "New Agreements"). The New Agreements and the Current Agreements are
substantially similar. The annual investment advisory fee for each Fund remains
the same; a rate of 0.75% of the average daily net assets for FIRST MUTUAL FUND
and 0.45% of the daily net assets of TRAINER, WORTHAM TOTAL RETURN BOND FUND
(the "TOTAL RETURN BOND FUND").
Following the transaction, David P. Como, Managing Director of Trainer, Wortham,
who has served as President of the Trust and has been primarily responsible for
the day-to-day investment management of FIRST MUTUAL FUND'S portfolio since
1982, will continue to serve as President of the Trust after the transaction
with First Republic Bank is complete.
<PAGE> 3
You are also being asked to elect Trustees of the Funds. Ten Trustees,
constituting the entire Board of Trustees, are to be elected at the Meeting.
Each Trustee so elected will hold office until his/her successor is elected and
qualifies, or until his/her term as Trustee is terminated as provided in the
Trust's By-Laws. The persons named as proxies in the accompanying proxy have
been designated by the Board of Trustees and intend to vote for the nominees
named, each of whom has consented to serve if elected.
I urge you to carefully read and review the enclosed proxy materials and join
the management of the Trust and the Board of Trustees in approving all of the
proposals. It is the hope of all involved that the Trust will be greatly
enhanced through its proposed relationship with First Republic Bank and its
dedicated group of financial and investment professionals who look forward to
advancing the interests of the Funds and their shareholders.
Thank you for carefully considering these important matters related to the
Funds. Please do not hesitate to contact us at (800) 257-4414 with any questions
you might have relative to the proxy.
Sincerely,
David P. Como
President
<PAGE> 4
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
-----------------------------------------
TRAINER, WORTHAM FIRST MUTUAL FUNDS
845 THIRD AVENUE, 6th FLOOR
NEW YORK, NEW YORK 10022
TO BE HELD NOVEMBER 14, 1998 AT 10:00 A.M. (PACIFIC TIME)
A Special Meeting of the Shareholders of FIRST MUTUAL FUND and TRAINER,
WORTHAM TOTAL RETURN BOND FUND (the "Funds"), each a series of TRAINER, WORTHAM
FIRST MUTUAL FUNDS (the "Trust"), will be held at the Silverado Country Club,
1600 Atlas Peak Road, Napa, California 94558, on November 14, 1998 at 10:00
a.m. Pacific Time, or at such adjourned time as may be necessary to vote for
the following purposes (the "Meeting"):
PROPOSAL 1(a). TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT BETWEEN TRAINER,
WORTHAM & COMPANY, INC., AND FIRST MUTUAL FUND (TO BE VOTED
ON SEPARATELY BY SHAREHOLDERS OF FIRST MUTUAL FUND)
PROPOSAL 1(b). TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT BETWEEN TRAINER,
WORTHAM & COMPANY, INC., AND TRAINER WORTHAM TOTAL RETURN BOND
FUND (TO BE VOTED ON SEPARATELY BY SHAREHOLDERS OF TRAINER,
WORTHAM TOTAL RETURN BOND FUND)
PROPOSAL 2. TO ELECT TRUSTEES OF THE TRUST (TO BE VOTED ON JOINTLY BY
SHAREHOLDERS OF BOTH FUNDS); AND
PROPOSAL 3. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.
Shareholders of record of each Fund at the close of business on October
9, 1998 (the "Record Date") will be entitled to vote at the Meeting. Each share
of each Fund is entitled to one vote and fractional shares have pro-rata voting
rights.
We urge you to sign, date and return your proxy in the enclosed
addressed envelope, which requires no postage and is intended for your
convenience. Your prompt return of your proxy or proxies may save the necessity
and expense of further solicitations to ensure a quorum at the Meeting. You may
vote your shares in person at the Meeting.
By Order of the Board of Trustees
David P. Como
President
<PAGE> 5
PROXY STATEMENT
---------------
TRAINER, WORTHAM FIRST MUTUAL FUNDS
845 THIRD AVENUE, 6th FLOOR
NEW YORK, NEW YORK 10022
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 14, 1998 AT 10:00 A.M. (PACIFIC TIME)
This Proxy Statement and enclosed form of proxy are furnished in
connection with the solicitation of proxies by and on behalf of the Trustees of
TRAINER, WORTHAM FIRST MUTUAL FUNDS (the "Trust"), to be used at a Special
Meeting of Shareholders of FIRST MUTUAL FUND and TRAINER, WORTHAM TOTAL RETURN
BOND FUND (the "Funds") to be held at Silverado Country Club, on November 14,
1998, at 10:00 a.m. Pacific Time or at any adjournment or adjournments
thereof, for the purposes set forth in the accompanying Notice.
This Proxy Statement and the form of proxy are being mailed to
shareholders on or about October 22, 1998. Any shareholder giving a proxy has
the power to revoke it by mail (addressed to the Secretary of the Funds at the
principal executive office of the Funds, 845 Third Avenue, 6th Floor, New York,
New York 10022) or in person at the Meeting, by executing a superseding proxy or
by submitting a notice of revocation to the Funds. All properly executed and
unrevoked proxies received in time for the Meeting will be voted as specified in
the proxy or, if no specification is made, for each proposal referred to in the
proxy statement.
Holders of record of the shares of beneficial interest of each Fund at
the close of business on October 9, 1998 (the "Record Date") will be entitled to
one vote per share on each proposal presented at the Meeting and fractional
shares have pro-rata voting rights.
A copy of the Funds' most recent annual report is available upon
request and without charge by calling the Funds at (800) 257-4414.
Trainer, Wortham & Company, Inc. ("Trainer, Wortham"), 845 Third
Avenue, 6th Floor, New York, New York 10022, currently serves as each Fund's
Investment Advisor. First Data Investor Services Group, Inc., 3200 Horizon
Drive, King of Prussia, Pennsylvania 19406, currently serves as the Funds'
Principal Underwriter and Administrator.
MATTERS TO BE CONSIDERED
PROPOSAL 1(a) Shareholders of First Mutual Fund only will vote on
this Proposal regarding approval of First Mutual Fund's
proposed new Investment Advisory Agreement with
Trainer, Wortham.
PROPOSAL 1(b) Shareholders of Total Return Bond Fund only will vote
on this Proposal regarding approval of Total Return
Bond Fund's proposed new Investment Advisory Agreement
with Trainer, Wortham.
PROPOSAL 2 Shareholders of both First Mutual Fund and Total Return
Bond Fund will vote together on this Proposal regarding
the election of Trustees of the Trust.
Information regarding Proposals 1(a) and 1(b) are being presented together
below because each Proposal relates to similar matters requiring similar
information.
<PAGE> 6
PROPOSALS 1(a) AND 1(b)
-----------------------
APPROVAL OF NEW
INVESTMENT ADVISORY AGREEMENTS
The Board of Trustees of the Trust is proposing that shareholders
approve new investment advisory agreements between each Fund and Trainer,
Wortham which will take effect when Trainer, Wortham becomes a wholly-owned
subsidiary of First Republic Bank (the"New Agreements"). First Republic Bank has
proposed to acquire control of Trainer, Wortham through an asset purchase
transaction as more fully discussed below (the "Transaction"). The form of the
New Agreement for First Mutual Fund with Trainer, Wortham is attached hereto as
Exhibit A and the form of the New Agreement for Trainer, Wortham Total Return
Bond Fund with Trainer, Wortham is attached hereto as Exhibit B.
Trainer, Wortham serves as Investment Adviser for the Funds pursuant to
existing Investment Advisory Agreements with Trainer, Wortham (the "Current
Agreements"). In connection with a proposed change in control of the ownership
of Trainer, Wortham pursuant to which First Republic Bank intends to acquire all
of the assets and certain liabilities of Trainer, Wortham, this change in
control of Trainer, Wortham constitutes an assignment (as that term is defined
in the Investment Company Act of 1940, as amended (the "1940 Act")) of each of
the Current Agreements. As required under the 1940 Act, each of the Current
Agreements provide for automatic termination in the event of an "assignment."
Because the Current Agreements will be terminated upon the completion
of the change in control of Trainer, Wortham, which is currently expected to
occur on or about December 1, 1998, it is necessary to adopt new investment
advisory agreements for each Fund. Management of the Funds made a proposal to
the Trustees at a meeting held on October 9, 1998, for the adoption of the New
Agreements. The New Agreements are substantially similar to the Current
Agreements and differ only with respect to certain non-material matters. The
Trustees at this meeting accepted this recommendation for the adoption of the
New Agreements and the Trustees are recommending that shareholders approve the
New Agreements.
The Trustees were advised that, in connection with carrying out the
Transaction, Trainer Wortham intends to rely on Section 15(f) of the 1940 Act
which provides a non-exclusive safe harbor for an investment adviser to an
investment company, and any of the investment adviser's affiliated persons (as
defined in the 1940 Act) to receive any amount or benefit in connection with a
change in control of the investment adviser so long as two conditions are met.
First, for a period of three years after the Transaction, at least 75% of the
Trustees must be persons who are not "interested persons" of the predecessor or
successor adviser. Trainer, Wortham and First Republic Bank have indicated that
they intend to comply with this 75% requirement with respect to the Trustees of
the Funds for the three year period following the Transaction and the nominees
for Trustee included herein under Proposal 2 would satisfy this requirement if
elected. The second condition of Section 15(f) is that, for a period of two
years following an acquisition, there must not be imposed on the Funds any
"unfair burden" as a result of the acquisition or any express or implied terms,
conditions or understandings related to it. An "unfair burden" would include any
arrangement whereby an investment adviser, or any interested person of the
investment adviser, would receive or be entitled to receive any compensation,
directly or indirectly, from each Fund or its shareholders (other than fees for
bona fide investment advisory
Page 1
<PAGE> 7
or other services) or from any person in connection with the purchase or sale of
securities or other property to, from or on behalf of each Fund (other than bona
fide ordinary compensation as principal underwriter for the Funds). In this
regard, the Trustees noted that no special compensation arrangements were
contemplated in connection with the Transaction.
1. THE PROPOSED CHANGE IN CONTROL OF TRAINER, WORTHAM
-----------------------------------------------------------
Presently, the Trust is organized as a Delaware business trust and
Trainer, Wortham, a Delaware corporation, serves as its Investment Advisor.
David P. Como, the current President of the Trust, and a nominee for Trustee, is
an officer, employee, director and shareholder of Trainer, Wortham.
It is proposed that, as a result of the Transaction, First Republic
Bank will acquire control of the assets of Trainer, Wortham. At present, First
Republic Bank owns 19.9% of Trainer, Wortham's outstanding common stock, and,
pursuant to the Transaction, First Republic Bank will acquire the remaining
80.1% of Trainer, Wortham's common stock that it does not currently own. Under
the terms of the Transaction, Mr. Como and the non-controlling partners of
Trainer, Wortham will receive payment from First Republic Bank in exchange for
the assets of Trainer, Wortham in an amount mutually agreed upon by the parties
to the Transaction that is deemed to be equitable. It is also proposed that Mr.
Como will remain an employee of Trainer, Wortham when such firm becomes a
wholly-owned subsidiary of First Republic Bank and he will continue to serve as
President of the Trust. Mr. Como has served as President of the Trust
(previously First Mutual Fund) since September 1981.
First Republic Bank is a customer service-oriented commercial bank
offering a broad range of loans as well as general, business and private banking
services. Headquartered at 388 Market Street, 2nd Floor, San Francisco,
California 94111, First Republic also has offices in California, Nevada and New
York City. First Republic has approximately $2.5 billion in total net assets.
The alliance with Trainer, Wortham & Company, Inc. will allow the Bank to offer
advisory and money management services to First Republic Bank clients.
2. THE CURRENT AGREEMENTS AND THE NEW AGREEMENTS
------------------------------------------------------
Under the terms of the Current Agreements, which are dated
September 30, 1996 for FIRST MUTUAL FUND and July 25, 1996 for the TOTAL RETURN
BOND FUND, last approved by Shareholders on July 25, 1996, Trainer, Wortham
manages the Funds' investments and each Fund pays Trainer, Wortham investment
advisory fees at an annual rate of 0.75% of average daily net assets for FIRST
MUTUAL FUND and 0.45% of average daily net assets for the TOTAL RETURN BOND
FUND. Trainer, Wortham began providing investment advisory services to the FIRST
MUTUAL FUND in January, 1981. For the fiscal year ended June 30, 1998, Trainer,
Wortham received advisory fees in the amount of $280,113 and $45,382 for FIRST
MUTUAL FUND and the TOTAL RETURN BOND FUND, respectively.
The investment advisory fees will not change under the New Agreements
and will therefore remain payable at an annual rate of 0.75% of average daily
net assets for FIRST MUTUAL FUND and 0.45% of average daily net assets for the
TOTAL RETURN BOND FUND. In addition Trainer, Wortham has voluntarily agreed for
a period of two years following the approval of the New Agreements, to limit the
TOTAL RETURN BOND FUND'S total operating expenses (exclusive of
Page 2
<PAGE> 8
taxes, brokerage commissions, interest and extraordinary expenses) to a maximum
rate of 1.2 % per annum.
Trainer, Wortham serves as the sub-investment adviser to an investment
company that has a similar investment objective to First Mutual Fund's
investment objective of seeking capital appreciation. Reserve Management, Inc.,
which is not affiliated with either Trainer, Wortham or First Republic Bank,
serves as the Investment Manager of this particular Fund.
Total Assets as of Investment
September 30, 1998 Advisory Fee Rate
------------------ -----------------
The Reserve Blue Chip Growth Fund $9,015,510.16 0.75% of the Fund's
of the Reserve Private Equity average daily net
Series assets
3. THE TRUSTEES' CONSIDERATIONS AND RECOMMENDATIONS
---------------------------------------------------------
In approving each New Agreement and determining to submit it to
shareholders for approval, the Trustees concluded that the compensation to be
paid by each Fund to Trainer, Wortham under the New Agreements is fair and
reasonable. In making this determination, the Trustees considered several
factors. The factors considered by the Trustees included: (1) the investment
management fees payable under the Current Agreements and those payable under the
New Agreements; (2) the current efforts and expenses of Trainer, Wortham in
rendering its services to the Funds and the proposed efforts and expenses of
Trainer, Wortham as a subsidiary of First Republic Bank in rendering services to
the Funds; (3) the nature, quality and extent of the services currently provided
by Trainer, Wortham to the Funds and the nature, quality and extent of the
services to be provided by Trainer, Wortham as a subsidiary of First Republic
Bank under the New Agreements; and (4) the fees charged by investment managers
operating funds with similar investment objectives. The Trustees also took
notice of the fact that the Investment Advisory fees stated under each New
Agreement are the same as those paid under the Current Agreements.
In addition, in considering whether to approve the New Agreements, the
Trustees placed special emphasis on the fact that Mr. Como will continue serving
as the President of the Trust. The Trustees were informed by Mr. Como that
Trainer, Wortham, as a wholly-owned subsidiary of the First Republic Bank
intends to continue, without interruption, the advisory services on behalf of
the Funds. First Republic Bank will acquire Trainer, Wortham's rights and
interests in the name "Trainer Wortham."
In the event that the New Agreements are not approved by the
shareholders of the Funds, the Trustees will consider what other action is
appropriate based upon their determination of the best interests of the
shareholders of each Fund. Similarly, in the event that First Republic Bank and
Trainer, Wortham fail to complete the Transaction for any reason even though the
requisite votes sought hereunder are received, the Trustees will consider
various options available to them with respect to the continued operation of
each Fund. First Republic Bank and Trainer, Wortham have each reserved the right
to not proceed with the completion of the Transaction even if the necessary
shareholder approvals under consideration herein have been obtained.
REQUIRED VOTE
Each Fund will vote separately with respect to the approval of
its Investment Advisory Agreement with Trainer, Wortham. The approval of the New
Agreements requires the affirmative vote of a majority of each Funds'
outstanding voting securities, which is defined in the 1940 Act to mean the vote
(i) of 67 percent or more of the voting securities present at the Meeting, if
the holders of more than 50 percent of the outstanding voting securities of the
Fund are present or represented by proxy, or (ii) of more than 50 percent of the
outstanding voting securities of the Fund, whichever is less.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE FOR THE
APPROVAL OF THE NEW INVESTMENT ADVISORY AGREEMENTS BEING CONSIDERED
UNDER PROPOSAL 1(a) AND PROPOSAL 1(b), AND ANY
SIGNED BUT UNMARKED PROXIES WILL BE SO VOTED.
Page 3
<PAGE> 9
PROPOSAL 2
----------
ELECTION OF TRUSTEES
It is being proposed that the Trustees be elected for the Funds. Eight
Trustees, constituting the entire Board of Trustees, are to be elected at the
Meeting. Each Trustee so elected will hold office until the next meeting of
shareholders and until his/her successor is elected and qualifies, or until
his/her term as Trustee is terminated as provided in the Trust's By-Laws. The
persons named as proxies in the accompanying proxy have been designated by the
Board of Trustees and intend to vote for the nominees named below, each of whom
has consented to serve if elected. All of the nominees, except Timothy J.
O'Hara, were most recently elected as Trustees of the Trust at the Special
Meeting of Shareholders held on August 8, 1996. Mr. O'Hara was reviewed and
recommended by the Nominating Committee and he began serving as a Trustee on
April 28, 1998. Should any nominees withdraw from the election or otherwise be
unable to serve, the named proxies will vote for the election of such substitute
nominee as the Board of Trustees may recommend, unless a decision is made to
reduce the number of Trustees serving on the Board.
Proxies which do not contain specific instructions to the contrary will
be voted in favor of the election of the nominees shown below. Set forth below
is certain information about each nominee:
<TABLE>
<CAPTION>
Principal Occupation
Name, Address and Age Position with the Trust During the Past Five Years
--------------------- ----------------------- --------------------------
<S> <C> <C>
James F. Twaddell (59) Chairman of the Board; Investment Banker at Schneider Securities,
c/o Schneider Securities, Inc. Trustee since 1979 Inc. since June 1995; Chairman of the Board,
2 Charles Street Director and Registered Representative of
Providence, RI 02904 Barclay Investment, Inc. until June 1995.
Robert H. Breslin, Jr. (70) Trustee since 1979; Partner in the law firm of Breslin &
107 Forge Road Member of Audit Sweeney, Warwick, RI.
E. Greenwich, RI 02818 Committee
David P. Como(1) (52) Trustee since 1984; Managing Director, Trainer, Wortham &
388 Market Street President Co., Inc.
2nd Floor
San Francisco, CA 94111
Raymond Eisenberg (75) Trustee since 1960; President of Raymond Eisenberg &
488 County Street Chairman of the Associates, PC Accountants and Auditors,
New Bedford, MA 02740 Audit Committee New Bedford, MA.
</TABLE>
Page 4
<PAGE> 10
<TABLE>
<CAPTION>
Principal Occupation
Name, Address and Age Position with the Trust During the Past Five Years
--------------------- ----------------------- --------------------------
<S> <C> <C>
David Elias(1) (53) Trustee since 1991 President and Chief Investment Officer of
500 Essjay Road Elias Asset Management, Inc., Buffalo, NY.
Suite 220
Williamsville, NY 14221
Retired; Engineer, Newport, RI; Director,
Robert S. Lazar (54) Trustee since 1976; Newport Federal Savings Bank, Newport, RI.
P.O. Box 4158 Member of the Audit
Middletown, RI 02842-0011 Committee
Martin S. Levine (45) Trustee since 1994; Controller and Chief Financial Officer of
c/o John P. Picone, Inc. Member of the Audit John P. Picone, Inc., Contractors and
31 Garden Lane Committee Engineers, Lawrence, NY.
Lawrence, NY 11559
Timothy J. O'Hara (48) Trustee since 1998 Mr. O'Hara is publisher of CU Journal,
Faulkner & Gray a national weekly financial newspaper
224 Datura Street, owned by Faulkner & Gray, Inc.
Suite 709
W. Palm Beach, FL 33401
</TABLE>
1 "Interested person" within the meaning of Section 2(a)(19) of
the 1940 Act. Mr. Como is considered to be an "interested
person" by reason of his affiliation with Trainer, Wortham. Mr.
Elias may be regarded as an "interested person" by reason of a
material business relationship with Trainer, Wortham.
Page 5
<PAGE> 11
AUDIT COMMITTEE
The Funds have an Audit Committee, presently consisting of current
Trustees, Mr. Eisenberg, Mr. Lazar, Mr. Levine and Mr. Breslin, none of whom are
"interested persons" as defined in the 1940 Act. The Audit Committee reviews
both the audit and non-audit work of the Funds' independent public accountants
and submits a recommendation to the Trustees as to the selection of independent
public accountants. The Audit Committee of the Funds held two meetings in the
last fiscal year.
NOMINATING COMMITTEE
The Funds have a Nominating Committee also consisting of all
independent trustees. The Nominating Committee reviews and recommends to the
full Board of Trustees candidates and nominees for election as Trustee. The
Nominating Committee met once during the Funds' most recent fiscal year. The
Nominating Committee will consider nominees recommended by securities holders of
the Funds. Securities holders interested in nominating candidates for election
should submit written information to the Secretary of the Funds for
consideration by the Nominating Committee.
COMPENSATION
Current Trustees of the Funds other than those affiliated with the
Funds' Investment Advisor are entitled to receive an annual retainer of $3,000
per annum and $500 per Board meeting and $200 for each Audit Committee meeting
attended, as well as reimbursement for all out-of-pocket expenses relating to
attendance at such meetings.
For the fiscal year ended June 30, 1998, the Trustees of the Funds
received the following compensation:
<TABLE>
<CAPTION>
Pension or
Retirement Total
Aggregate Benefits Accrued Est. Annual Compensation From
Compensation from As Part of Fund Benefits Upon the
Name of Trustee the Trust Expenses Retirement Fund Complex
- --------------- --------- -------- ---------- ------------
<S> <C> <C> <C> <C>
James F. Twaddell $5,000 N/A N/A $5,000
Robert H. Breslin, Jr. $5,200 N/A N/A $5,200
David P. Como* $0 N/A N/A $0
Raymond Eisenberg $4,700 N/A N/A $4,700
David Elias* $0 N/A N/A $0
Robert S. Lazar $5,200 N/A N/A $5,200
Martin S. Levine $5,200 N/A N/A $5,200
Therese Thibadeau** $0 N/A N/A $0
Timothy J. O'Hara*** $0 N/A N/A $0
</TABLE>
* "Interested person" within the meaning of Section 2(a)(19) of the 1940 Act.
Mr. Como is considered to be an "interested person" by reason of his
affiliation with Trainer, Wortham. Mr. Elias may be regarded as an
"interested person" by reason of a material business relationship with
Trainer, Wortham.
** Ms. Thibadeau ceased serving as a Trustee effective October 7, 1998. Ms.
Thibadeau was considered to be an "interested person" because she is Mr.
Como's sister.
*** Mr. O'Hara became a Trustee on April 28, 1998.
Page 6
<PAGE> 12
As of the Record Date, the Trustees and officers of each Fund as a
group owned less than 1% of the outstanding shares of common stock of each Fund.
It is anticipated that the Trustees and officers will vote their shares in favor
of each of the Proposals.
REQUIRED VOTE
The election of each of the above nominees requires the affirmative
vote of a plurality of the votes cast at the Meeting by shareholders of the
Funds.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE FOR EACH OF THE NOMINEES, AND ANY
SIGNED BUT UNMARKED PROXIES WILL BE SO VOTED.
OTHER INFORMATION
SHARE OWNERSHIP OF THE FUNDS
The total number of shares outstanding of each Fund as of the Record
Date are as follows: (1) First Mutual Fund: 3,087,537.343 shares; and (2)
Trainer Wortham Total Return Bond Fund 1,220,029.922 shares. The following
table sets forth the information concerning beneficial ownership, as of the
Record Date, of the Funds' shares by each person or entity who beneficially
owns more than five percent of the voting securities of each Fund:
First Mutual Fund:
<TABLE>
Percentage of
Name and Address of Shareholder Shares Beneficially Owned(1) Outstanding Shares Owned
------------------------------- ---------------------------- ------------------------
<S> <C> <C>
Trainer, Wortham Profit Sharing Trst 331,863.156 10.74%
c/o Trainer, Wortham
845 Third Ave 6th Fl
New York, NY 10022
Perry R. Como 232,586.649 7.53%
c/o Trainer, Wortham & Co Inc
845 Third Ave 6th Fl
New York, NY 10022
Roncom Productions Employees 214,145.992 6.93%
Deferred Profit Sharing Tr
845 Third Ave 6th Fl
New York, NY 10022
Semper Trust Co c/f IRA r/o of 165,724.379 5.36%
Alice Stone Trainer
35 B Heritage Ct
Southbury, CT 06488
</TABLE>
Trainer, Wortham Total Return Bond Fund:
<TABLE>
Percentage of
Name and Address of Shareholder Shares Beneficially Owned(1) Outstanding Shares Owned
------------------------------- ---------------------------- ------------------------
<S> <C> <C>
H. Williamson Ghriskey Jr. 293,510.316 24.05%
TRST Margot Marsh Biodiversity Fndation
c/o Trainer, Wortham & Co
845 Third Ave 6th Fl
New York, NY 10022
HW Mali Profit Sharing RET Plan 181,079.139 14.84%
c/o Trainer, Wortham Co Inc
845 Third Ave 6th Fl
New York, NY 10022
Daniel U Escaro 113,192.991 9.27%
TRST York Labs PSP
DTD N/A
c/o York Hospital
1001 S. George St
York, PA 17405
</TABLE>
(1) "Beneficial ownership" is defined under Section 13(d) of the Securities
Exchange Act of 1934.
MANNER OF VOTING PROXIES
All proxies received will be voted on all matters presented at the
Meeting, and if not limited to the contrary, will be voted FOR Proposals 1(a),
1(b) and 2.
Management knows of no other matters to be brought before the Meeting.
If, however, any other matters properly come before the Meeting, it is
Management's intention that proxies not limited to the contrary will be voted in
accordance with the judgment of the persons named in the enclosed form of proxy.
Broker "non-votes" (that is, proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
Page 7
<PAGE> 13
owner or other persons entitled to vote shares on a particular matter with
respect to which the brokers or nominees do not have discretionary power) will
have the same effect as abstentions in determining whether an issue has received
the requisite approval. Where the broker or nominee has no discretion to vote
the shares as to one or more proposals before the Meeting, the non-voted shares
will be excluded from the pool of shares voted on such issues. Thus, abstentions
and non-votes will have the same effect as a negative vote on issues requiring
the affirmative vote of a specified portion of the Fund's outstanding shares,
but will not be considered votes cast and thus will have no effect on matters
requiring approval of a specified percentage of votes cast.
In the event that at the time any session of the Meeting is called to
order a quorum is not present in person or by proxy, the persons named as
proxies may vote those proxies which have been received to adjourn the Meeting
to a later date. In the event that a quorum is present but sufficient votes in
favor of the proposals set forth in the Notice of Meeting have not been
received, the persons named as proxies may propose one or more adjournments of
the Meeting to permit further solicitations of proxies with respect to those
items. Any such adjournment will require the affirmative vote of a majority of
the shares present in person or by proxy at the session of the Meeting to be
adjourned. The persons named as proxies will vote those proxies which they are
entitled to vote for any such item in favor of such an adjournment, and will
vote those proxies required to be voted against any such item against any such
adjournment. A shareholder vote may be taken on one or more of the items in this
Proxy Statement prior to such adjournment if sufficient votes for its approval
have been received and it is otherwise appropriate.
SUBMISSION OF CERTAIN PROPOSALS
Proposals of shareholders which are intended to be presented at a
future shareholders' meeting must be received by each Fund by a reasonable time
prior to the Funds' solicitation of proxies relating to such future meeting.
Shareholder proposals must meet certain requirements and there is no guarantee
that any proposal will be presented at a shareholder meeting.
ADDITIONAL INFORMATION
The expense of the preparation, printing and mailing of the enclosed
form of proxy, this Notice and Proxy Statement and other expenses relating to
the Meeting will be borne jointly by Trainer, Wortham and First Republic Bank.
To obtain the necessary representation at the Meeting, supplementary
solicitations may be made by mail, telephone, or interview by officers of the
Funds and/or employees of Trainer, Wortham. You may contact Debi Clark,
Secretary of the Trust at 800.257.4414.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY
October 21, 1998
Page 8
<PAGE> 14
EXHIBIT A
INVESTMENT ADVISORY AGREEMENT
This Agreement, dated as of the ____ th day of _________, 1998, made by
and between Trainer, Wortham First Mutual Funds, a business trust (the "Trust"
operating as an open-end, management investment company registered under the
Investment Company Act of 1940, as amended (the "Act"), on behalf of FIRST
MUTUAL FUND (the "Series") and Trainer, Wortham & Co., Inc., a wholly-owned
subsidiary of First Republic Bank, with its principal offices at 845 Third
Avenue, 6th Floor, New York, NY 10022 ("Investment Advisor").
WHEREAS, the Trust is registered as an open-end, management investment
company under the Act; and
WHEREAS, the Trust desires to retain the Investment Advisor to furnish
investment advisory and administrative services with respect to the Series, and
the Investment Advisor is willing to so furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties as follows:
1. APPOINTMENT. The Trust hereby appoints the Investment Advisor to act
as investment advisor to the Series for the period and on the terms set forth in
this Agreement. The Investment Advisor accepts such appointment and agrees to
furnish the services herein set forth for the compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Series has furnished the Investment
Advisor with copies of each of the following:
(a) Resolutions of the Board of Trustees authorizing the
appointment of the Investment Advisor and approving this Agreement;
(b) The Series most recent prospectus and Statement of
Additional Information (such prospectus and Statement of Additional Information,
as presently in effect and all amendments and supplements thereto, are herein
called the "Prospectus").
The Series will furnish the Investment Advisor from time to time with
copies of all amendments of or supplements to the foregoing.
3. MANAGEMENT Subject to the supervision of the Board of Trustees, the
Investment Advisor will provide a continuous investment program for the Series,
including investment research and day-to-day management of the Series' assets.
The Investment Advisor will determine from time to time what securities and
other investment will be purchased, retained or sold by the Series. The
Investment Advisor will provide the services under this Agreement in accordance
with the Series' investment objective, policies and restrictions as stated in
the Prospectus and resolutions of the Board of Trustees. The Series wishes to be
informed of important developments materially affecting the Series and its
shareholders, and the Investment Advisor agrees to furnish to the Series, from
time to time, such information as may be appropriate for this purpose. The
Investment Advisor further agrees that it:
Page 1 of 4
<PAGE> 15
(a) will conform with all applicable Rules and Regulations of
the Securities and Exchange Commission;
(b) will place orders pursuant to its investment
determinations for the Series either directly with the issuer or with any broker
or dealer. In executing portfolio transactions, the Investment Advisor will use
its best efforts to seek on behalf of the Series the best overall terms
available. In assessing the best overall terms available for any transaction,
the Investment Advisor shall consider all factors that it deems relevant,
including the breadth of the market in the security, the price of the security,
the financial condition and execution capability of the broker or dealer, and
the reasonableness of the commission, if any, both for the specific transaction
and on a continuing basis. In evaluating the best overall terms available, and
in selecting the broker-dealer to execute a particular transaction, the
Investment Advisor may also consider the brokerage and research services (as
those terms are defined in Section 28 (e) of the Securities Exchange Act of
1934) provided to the Series and any other accounts over which the Investment
Advisor exercises investment discretion. The Investment Advisor is authorized,
subject to the prior approval of the Board of Trustees, to pay a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for the Series which is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction in such instances where the Investment Advisor determines in
good faith that such commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer as viewed in
terms of that particular transaction or in terms of the overall responsibilities
of the Investment Advisor to the Series. In addition, the Investment Advisor may
take into account the sale of the Series' units in allocating purchase and sale
orders for portfolio securities to brokers or dealers (including affiliated
brokers and dealers that are affiliated with the Series, the Investment Advisor
or the principal underwriter), provided that the Investment Advisor believes
that the quality of execution and the commission are comparable to what they
would be by other qualified firms. In no instance, however, will portfolio
securities be purchased from or sold to the Investment Advisor, the principal
underwriter or any affiliated person of either the Series, the Investment
Advisor or the principal underwriter or any affiliated person of the Series, the
Investment Advisor or the principal underwriter, acting as principal in the
transaction except to the extent permitted by the Securities and Exchange
Commission and the National Association of Securities Dealers, Inc.;
(c) will maintain all books and records with respect to the
Series' securities transactions which the Series is required to maintain under
applicable laws and will furnish the Board of Trustees such periodic and special
reports as the Board may request; and
(d) will treat confidentially and as proprietary information
of the Series all records and other information relative to the Series and
prior, present or potential shareholders, and will not use such records and
information for any purpose other than performance of its responsibilities and
duties hereunder, except after prior notification to, and approval in writing
by, the Board of Trustees, which approval shall not be unreasonably withheld and
may not be withheld where the Investment Advisor may be exposed to civil or
criminal contempt proceedings for failure to comply, when requested to divulge
such information by duly constituted authorities, or when so requested by the
Board of Trustees.
Page 2 of 4
<PAGE> 16
4. SERVICES NOT EXCLUSIVE. The investment management services furnished
by the Investment Advisor hereunder are not to be deemed exclusive, and the
Investment Advisor shall be free to furnish similar services to others whether
or not for compensation so long as its services under this Agreement are not
impaired thereby.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Investment Advisor hereby agrees that all records which
it maintains for the Series are the property of the Series and further agrees to
surrender promptly to the Series any of such records upon the Series' request.
The Investment Advisor further agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act the records required by Rule 31a-1 to be
maintained under the 1940 Act.
6. EXPENSES. During the term of this Agreement, the Investment Advisor
will pay all expenses incurred by it in connection with its activities under
this Agreement other than the cost of securities (including brokerage
commissions, if any) purchased for the Series.
7. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, effective as of the date of the effectiveness of
this Agreement, the Series will pay the Investment Advisor and the Investment
Advisor will accept as full compensation therefor a fee, accrued daily and paid
monthly, at an annual rate of 0.75 of 1% of the daily net asset value of the
Series.
8. LIMITATION OF LIABILITY. The Investment Advisor shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Series in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of the Investment Advisor in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
9. DURATION AND TERMINATION. This Agreement will become effective at
such time as shall have been approved by the shareholders of the Series, in
accordance with the requirements under the 1940 Act, and the existing advisory
contract with Trainer, Wortham & Co., Inc. shall have been terminated, and,
unless sooner terminated as provided herein, shall continue in effect until
____________, 19__, and thereafter for successive periods of twelve months,
provided such continuance is specifically approved at least annually (a) by the
vote of a majority of those members of the Board of Trustees who are not parties
to this
Page 3 of 4
<PAGE> 17
Agreement or interested persons of any party to this Agreement, cast in person
at a meeting called for the purpose of voting on such approval, and (b) by the
Board of Trustees or by vote of a majority of the outstanding voting securities
of the Series. Notwithstanding the foregoing, this Agreement may be terminated
at any time, without the payment of any penalty, by the Series (by vote of the
Board of Trustees or by vote of a majority of the outstanding voting securities
of the Series) on sixty days' written notice or by the Investment Advisor on
ninety days' written notice. This Agreement will immediately terminate in the
event of its assignment. (As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested persons" and "assignment" shall have
the same meaning of such terms in the 1940 Act.)
10. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Agreement shall be
effective until approved by vote of a majority of the outstanding voting
securities of the Series.
11. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be affect
thereby. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and shall be governed by
Delaware law.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
Trainer, Wortham First Mutual Funds
on behalf of
First Mutual Fund
By
-------------------------------------
President
Trainer, Wortham & Co., Inc.
By
-------------------------------------
Managing Director
Page 4 of 4
<PAGE> 18
Exhibit B
INVESTMENT ADVISORY AGREEMENT
This Agreement, dated as of the ___th day of __________, 1998, made by
and between Trainer, Wortham First Mutual Funds, a business trust (the "Trust")
operating as an open-end, management investment company registered under the
Investment Company Act of 1940, as amended (the "Act"), on behalf of TRAINER,
WORTHAM TOTAL RETURN BOND FUND (the "Series") and Trainer, Wortham & Co., Inc.,
a wholly-owned subsidiary of First Republic Bank, with its principal offices at
845 Third Avenue, 6th Floor, New York, NY 10022 ("Investment Advisor").
WHEREAS, the Trust is registered as an open-end, management investment
company under the Act; and
WHEREAS, the Trust desires to retain the Investment Advisor to furnish
investment advisory and administrative services with respect to the Series, and
the Investment Advisor is willing to so furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties as follows:
1. APPOINTMENT. The Trust hereby appoints the Investment Advisor to act
as investment advisor to the Series for the period and on the terms set forth in
this Agreement. The Investment Advisor accepts such appointment and agrees to
furnish the services herein set forth for the compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Series has furnished the Investment
Advisor with copies of each of the following:
(a) Resolutions of the Board of Trustees authorizing the
appointment of the Investment Advisor and approving this Agreement;
(b) The Series most recent prospectus and Statement of
Additional Information (such prospectus and Statement of Additional Information,
as presently in effect and all amendments and supplements thereto, are herein
called the "Prospectus").
The Series will furnish the Investment Advisor from time to time with
copies of all amendments of or supplements to the foregoing.
3. MANAGEMENT Subject to the supervision of the Board of Trustees, the
Investment Advisor will provide a continuous investment program for the Series,
including investment research and day-to-day management of the Series' assets.
The Investment Advisor will determine from time to time what securities and
other investment will be purchased, retained or sold by the Series. The
Investment Advisor will provide the services under this Agreement in accordance
with the Series' investment objective, policies and restrictions as stated in
the Prospectus and resolutions of the Board of Trustees. The Series wishes to be
informed of important developments materially affecting the Series and its
shareholders, and the Investment Advisor agrees to furnish to the Series, from
time to time, such information as may be appropriate for this purpose. The
Investment Advisor further agrees that it:
Page 1 of 4
<PAGE> 19
(a) will conform with all applicable Rules and Regulations of
the Securities and Exchange Commission;
(b) will place orders pursuant to its investment
determinations for the Series either directly with the issuer or with any broker
or dealer. In executing portfolio transactions, the Investment Advisor will use
its best efforts to seek on behalf of the Series the best overall terms
available. In assessing the best overall terms available for any transaction,
the Investment Advisor shall consider all factors that it deems relevant,
including the breadth of the market in the security, the price of the security,
the financial condition and execution capability of the broker or dealer, and
the reasonableness of the commission, if any, both for the specific transaction
and on a continuing basis. In evaluating the best overall terms available, and
in selecting the broker-dealer to execute a particular transaction, the
Investment Advisor may also consider the brokerage and research services (as
those terms are defined in Section 28 (e) of the Securities Exchange Act of
1934) provided to the Series and any other accounts over which the Investment
Advisor exercises investment discretion. The Investment Advisor is authorized,
subject to the prior approval of the Board of Trustees, to pay a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for the Series which is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction in such instances where the Investment Advisor determines in
good faith that such commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer as viewed in
terms of that particular transaction or in terms of the overall responsibilities
of the Investment Advisor to the Series. In addition, the Investment Advisor may
take into account the sale of the Series' units in allocating purchase and sale
orders for portfolio securities to brokers or dealers (including affiliated
brokers and dealers that are affiliated with the Series, the Investment Advisor
or the principal underwriter), provided that the Investment Advisor believes
that the quality of execution and the commission are comparable to what they
would be by other qualified firms. In no instance, however, will portfolio
securities be purchased from or sold to the Investment Advisor, the principal
underwriter or any affiliated person of either the Series, the Investment
Advisor or the principal underwriter or any affiliated person of the Series, the
Investment Advisor or the principal underwriter, acting as principal in the
transaction except to the extent permitted by the Securities and Exchange
Commission and the National Association of Securities Dealers, Inc.;
(c) will maintain all books and records with respect to the
Series' securities transactions which the Series is required to maintain under
applicable laws and will furnish the Board of Trustees such periodic and special
reports as the Board may request; and
(d) will treat confidentially and as proprietary information
of the Series all records and other information relative to the Series and
prior, present or potential shareholders, and will not use such records and
information for any purpose other than performance of its responsibilities and
duties hereunder, except after prior notification to, and approval in writing
by, the Board of Trustees, which approval shall not be unreasonably withheld and
may not be withheld where the Investment Advisor may be exposed to civil or
criminal contempt proceedings for failure to comply, when requested to divulge
such information by duly constituted authorities, or when so requested by the
Board of Trustees.
Page 2 of 4
<PAGE> 20
4. SERVICES NOT EXCLUSIVE. The investment management services furnished
by the Investment Advisor hereunder are not to be deemed exclusive, and the
Investment Advisor shall be free to furnish similar services to others whether
or not for compensation so long as its services under this Agreement are not
impaired thereby.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Investment Advisor hereby agrees that all records which
it maintains for the Series are the property of the Series and further agrees to
surrender promptly to the Series any of such records upon the Series' request.
The Investment Advisor further agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act the records required by Rule 31a-1 to be
maintained under the 1940 Act.
6. EXPENSES. During the term of this Agreement, the Investment Advisor
will pay all expenses incurred by it in connection with its activities under
this Agreement other than the cost of securities (including brokerage
commissions, if any) purchased for the Series.
7. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, effective as of the date of the effectiveness of
this Agreement, the Series will pay the Investment Advisor and the Investment
Advisor will accept as full compensation therefor a fee, accrued daily and paid
monthly, at an annual rate of 0.45 of 1% of the daily net asset value of the
Series.
8. LIMITATION OF LIABILITY. The Investment Advisor shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Series in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of the Investment Advisor in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
9. DURATION AND TERMINATION. This Agreement will become effective at
such time as shall have been approved by the shareholders of the Series, in
accordance with the requirements under the 1940 Act, and the existing advisory
contract with Trainer, Wortham & Co., Inc. shall have been terminated, and,
unless sooner terminated as provided herein, shall continue in effect until
___________, 19__, and thereafter for successive periods of twelve months,
provided such continuance is specifically approved at least annually (a) by the
vote of a majority of those members of the Board of Trustees who are not parties
to this
Page 3 of 4
<PAGE> 21
Agreement or interested persons of any party to this Agreement, cast in person
at a meeting called for the purpose of voting on such approval, and (b) by the
Board of Trustees or by vote of a majority of the outstanding voting securities
of the Series. Notwithstanding the foregoing, this Agreement may be terminated
at any time, without the payment of any penalty, by the Series (by vote of the
Board of Trustees or by vote of a majority of the outstanding voting securities
of the Series) on sixty days' written notice or by the Investment Advisor on
ninety days' written notice. This Agreement will immediately terminate in the
event of its assignment. (As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested persons" and "assignment" shall have
the same meaning of such terms in the 1940 Act.)
10. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Agreement shall be
effective until approved by vote of a majority of the outstanding voting
securities of the Series.
11. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be affect
thereby. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and shall be governed by
Delaware law.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
Trainer, Wortham First Mutual Funds
on behalf of
TRAINER, WORTHAM TOTAL RETURN BOND FUND
By
------------------------------------
President
Trainer, Wortham & Co., Inc.
By
------------------------------------
Managing Director
Page 4 of 4
<PAGE> 22
PROXY THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES PROXY
OF TRAINER, WORTHAM FIRST MUTUAL FUNDS (THE "TRUST")
FOR USE BY FIRST MUTUAL FUND SHAREHOLDERS ONLY
SPECIAL MEETING -- NOVEMBER 14, 1998 AT 10:00 A.M. PACIFIC TIME
The undersigned hereby revokes all previous proxies for his shares and appoints
DAVID P. COMO and DEBRA L. CLARK, and each of them, with the power of
substitution, as Proxies, and hereby authorizes them to vote as designated
below, as effectively as the undersigned could do if personally present, all the
shares of TRAINER, WORTHAM FIRST MUTUAL FUNDS held of record by the undersigned
on October 9, 1998, at the Special Meeting of Shareholders, or any adjournment
thereof, to be held at 10:00 a.m. Pacific Time on November 14, 1998 at the
Silverado Country Club, 1600 Atlas Peak Road, Napa, California 94558.
<TABLE>
<S> <C> <C> <C>
PROPOSAL 1(a). APPROVAL OF A NEW INVESTMENT ADVISORY AGREEMENT BETWEEN
TRAINER, WORTHAM & CO., INC., AND FIRST MUTUAL FUND
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL 2. ELECTION OF TRUSTEES.
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees listed below
(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below.)
James F. Twaddell David P. Como Robert H. Breslin, Jr.
David Elias Robert S. Lazar Martin S. Levine
Timothy J. O'Hara Raymond Eisenberg
PROPOSAL 3. TRANSACTION OF SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(CONTINUED AND TO BE SIGNED ON REVERSE.)
</TABLE>
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY IMMEDIATELY IN THE
POSTAGE-PAID ENVELOPE PROVIDED.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES AND WHEN PROPERLY
EXECUTED WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE
UNDERSIGNED'S VOTE, AS A SHAREHOLDER OF FIRST MUTUAL FUND, WILL BE CAST FOR
PROPOSAL 1(a) AND FOR THE ELECTION OF ALL TRUSTEES AND FOR PROPOSAL (2). IF ANY
OTHER MATTERS PROPERLY COME BEFORE THE MEETING ABOUT WHICH THE PROXY HOLDERS
WERE NOT AWARE PRIOR TO THE TIME OF THE SOLICITATION OF THE TRUST, AUTHORIZATION
IS GIVEN TO THE PROXY HOLDERS TO VOTE IN ACCORDANCE WITH THEIR JUDGEMENT ON SUCH
MATTERS. MANAGEMENT IS NOT AWARE OF ANY SUCH MATTERS. THE UNDERSIGNED
ACKNOWLEDGES RECEIPT OF THE NOTICE OF MEETING AND PROXY STATEMENT DATED OCTOBER
9, 1998. PLEASE SIGN EXACTLY AS NAME APPEARS BELOW. WHEN SHARES ARE HELD BY
JOINT TENANTS, BOTH SHOULD SIGN.
Dated: _____________________, 1998
__________________________________
Signature*
__________________________________
Signature if held jointly
* PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THIS PROXY. IF SIGNING FOR AN
ESTATE, TRUST OR CORPORATION, TITLE OR CAPACITY SHOULD BE STATED.
===========================================================================
CHECK HERE [ ] IF YOU PLAN TO ATTEND THE MEETING. (__PERSON(S) ATTENDING)
===========================================================================
<PAGE> 23
PROXY THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES PROXY
OF TRAINER, WORTHAM FIRST MUTUAL FUNDS (THE "TRUST")
FOR USE BY TRAINER, WORTHAM TOTAL RETURN BOND FUND SHAREHOLDERS ONLY
SPECIAL MEETING -- NOVEMBER 14, 1998 AT 10:00 A.M. PACIFIC TIME
The undersigned hereby revokes all previous proxies for his shares and appoints
DAVID P. COMO and DEBRA L. CLARK, and each of them, with the power of
substitution, as Proxies, and hereby authorizes them to vote as designated
below, as effectively as the undersigned could do if personally present, all the
shares of TRAINER, WORTHAM FIRST MUTUAL FUNDS held of record by the undersigned
on October 9, 1998, at the Special Meeting of Shareholders, or any adjournment
thereof, to be held at 10:00 a.m. Pacific Time on November 14, 1998 at the
Silverado Country Club, 1600 Atlas Peak Road, Napa, California 94558.
<TABLE>
<S> <C> <C> <C>
PROPOSAL 1(b). APPROVAL OF A NEW INVESTMENT ADVISORY AGREEMENT BETWEEN
TRAINER, WORTHAM & CO., INC. AND TRAINER, WORTHAM TOTAL RETURN
BOND FUND
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL 2. ELECTION OF TRUSTEES.
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees listed below
(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below.)
James F. Twaddell David P. Como Robert H. Breslin, Jr.
David Elias Robert S. Lazar Martin S. Levine
Timothy J. O'Hara Raymond Eisenberg
PROPOSAL 3. TRANSACTION OF SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(CONTINUED AND TO BE SIGNED ON REVERSE.)
</TABLE>
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY IMMEDIATELY IN THE
POSTAGE-PAID ENVELOPE PROVIDED.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES AND WHEN PROPERLY
EXECUTED WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE
UNDERSIGNED'S VOTE, AS A SHAREHOLDER OF TRAINER, WORTHAM TOTAL RETURN BOND FUND
WILL BE CAST FOR PROPOSAL 1(b) AND FOR THE ELECTION OF ALL TRUSTEES AND FOR
PROPOSAL (2). IF ANY OTHER MATTERS PROPERLY COME BEFORE THE MEETING ABOUT WHICH
THE PROXY HOLDERS WERE NOT AWARE PRIOR TO THE TIME OF THE SOLICITATION OF THE
TRUST, AUTHORIZATION IS GIVEN TO THE PROXY HOLDERS TO VOTE IN ACCORDANCE WITH
THEIR JUDGEMENT ON SUCH MATTERS. MANAGEMENT IS NOT AWARE OF ANY SUCH MATTERS.
THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE NOTICE OF MEETING AND PROXY
STATEMENT DATED OCTOBER 9, 1998. PLEASE SIGN EXACTLY AS NAME APPEARS BELOW.
WHEN SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN.R
Dated: _____________________, 1998
__________________________________
Signature*
__________________________________
Signature if held jointly
* PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THIS PROXY. IF SIGNING FOR AN
ESTATE, TRUST OR CORPORATION, TITLE OR CAPACITY SHOULD BE STATED.
============================================================================
CHECK HERE [ ] IF YOU PLAN TO ATTEND THE MEETING. (__PERSON(S) ATTENDING)
============================================================================
